Free Washington D.C. Real Estate Practice Exam

Q1.The DC Real Estate Commission has the power to promulgate rules governing real estate brokerage practice in the District. Under the DC Administrative Procedure Act (D.C. Code § 2-501 et seq.) and DCREC authority, how must the Commission adopt new substantive rules?

• A.The Commission's chair may issue new rules by internal memorandum without any public notice or comment period
• B.New rules must be promulgated through the notice-and-comment rulemaking process, published in the DC Register, with an opportunity for public comment before becoming effective
• C.The Commission may adopt emergency rules that are immediately permanent and are not subject to any subsequent review or expiration
• D.All new substantive real estate rules must first be approved by the US Congress before taking effect in the District

Q2.Which function may a temporarily designated salesperson not perform under § 32-2127(D)?

• A.Receive office communications.
• B.Hire or sever licensees.
• C.Follow the PPM.
• D.Escalate a compliance issue.

Q3.In Washington DC, real estate salesperson licenses are issued by which body and must be renewed on what basis to remain active?

• A.The DC Department of Consumer and Regulatory Affairs; renewed annually
• B.The DC Real Estate Commission; renewed on a two-year cycle with continuing education
• C.The National Association of REALTORS®; renewed every three years
• D.The DC Office of Tax and Revenue; renewed every five years

Q4.A managing broker in Washington, D.C. operates a residential brokerage with six affiliated licensees. During a routine internal audit, the broker discovers that one of the salespersons has been steering African American clients away from listings in predominantly white neighborhoods in Northwest D.C. and toward properties only in specific Southeast D.C. zip codes, without any client-initiated preference. The broker immediately terminates the salesperson. Under the federal Fair Housing Act and broker supervisory liability principles, which statement BEST describes the managing broker's legal exposure and the most prudent subsequent action?

• A.The broker may still face vicarious liability under the Fair Housing Act for the salesperson's steering conduct because the Act imposes supervisory liability on brokers for the discriminatory acts of their affiliated licensees committed within the scope of the employment or agency relationship, and the broker should proactively document remedial steps, retrain remaining staff, and consider self-reporting to HUD to demonstrate good faith.
• B.The broker is fully insulated from liability because terminating the salesperson immediately constitutes an affirmative defense that completely extinguishes any Fair Housing Act claim arising from the salesperson's prior conduct.
• C.The broker's liability is limited exclusively to a civil penalty under the Fair Housing Act, which is capped at $16,000 for a first offense, and no further remedial action or retraining obligation exists once the offending licensee is removed.
• D.Because the steering occurred at the salesperson level and not at the broker's direction, the Fair Housing Act's respondeat superior doctrine does not apply to real estate brokerages, and the broker bears no liability for the salesperson's independent discriminatory conduct.

Q5.A DC broker is drafting a brokerage services agreement for a seller client. Under DC Code § 42-1703(b) and 17 DCMR § 3901, which of the following elements is REQUIRED to be included in a written listing agreement to comply with DC statutory requirements?

• A.A guaranteed sale price determined by the broker based on a comparative market analysis conducted within 30 days of signing.
• B.A definite expiration date, the amount or method of computing the compensation, and a disclosure of the brokerage's agency relationship with the seller.
• C.An automatic renewal clause allowing the agreement to extend month-to-month unless the seller provides 60-days written notice of cancellation.
• D.A clause requiring the seller to disclose all known defects directly to the broker within 10 days of listing.

Q6.A real estate salesperson is working as a dual agent with informed written consent from both the seller and buyer. Which of the following activities would be MOST appropriate for the dual agent to perform?

• A.Present all offers and counteroffers objectively without advocating for either party's price position.
• B.Advise the seller to reject the buyer's offer because the agent believes the buyer can pay more.
• C.Share the seller's minimum acceptable price with the buyer to help close the deal faster.
• D.Recommend that the buyer waive the inspection contingency to make their offer more competitive.

Q7.Under DC Code § 42-1703, a licensed DC broker who supervises affiliated salespersons must ensure that each salesperson's activities are conducted under which specific supervisory standard?

• A.The broker must provide general oversight and is liable only for willful misconduct of affiliated salespersons.
• B.The broker must actively supervise all licensed activities of affiliated salespersons and may be subject to disciplinary action for failure to supervise, regardless of whether the broker had actual knowledge of a salesperson's violation.
• C.The broker's supervisory duty is limited to reviewing all written purchase agreements before execution.
• D.The broker is only responsible for supervising salespersons during their first 90 days of affiliation.

Q8.A buyer finances the purchase of a commercial property and discovers post-closing that the site contains significant hazardous waste contamination from a prior industrial owner. Under CERCLA, which of the following parties may be held liable for cleanup costs?

• A.Only the party that originally deposited the hazardous substances on the property
• B.Only the current owner, because liability transfers with title at closing
• C.The current owner, prior owners who owned during disposal, arrangers, and transporters of the hazardous substances
• D.No party is liable if the contamination occurred before CERCLA was enacted in 1980

Q9.Which phrase should be removed from a rental advertisement?

• A.One-bedroom unit with covered parking
• B.Walk-in shower and ground-floor entry
• C.Perfect for singles; no children preferred
• D.Available October 1

Q10.Under the federal Truth-in-Lending Act (TILA), the Annual Percentage Rate (APR) disclosed to a borrower is best described as:

• A.The base interest rate on the loan as set by the lender
• B.The Federal Reserve's benchmark rate used to calculate mortgage payments
• C.The true cost of credit expressed as a yearly rate, including interest and certain fees and charges
• D.The total dollar amount of interest the borrower will pay over the life of the loan

Q11.A brokerage buys cyber coverage and also requires independent wire verification. Which risk treatments are being used?

• A.Accept and ignore.
• B.Transfer and mitigate.
• C.Avoid and conceal.
• D.Only transfer.

Q12.Which rule requires the employing broker's legal name or licensed DBA to be clear and prominent in advertising?

• A.R4-28-301
• B.R4-28-502(E)
• C.R4-28-503(D)
• D.R4-28-1103(F)

Q13.When documenting witnessed harassment, which record is most useful in an enforcement action?

• A.A summary written weeks later with your legal conclusions included
• B.A detailed emotional account describing your personal reaction
• C.A general note stating that 'a potential fair housing violation occurred'
• D.A factual, specific record created the same day (contemporaneous) using exact words and observable conduct

Q14.The Faragher-Ellerth affirmative defense allows a brokerage to limit vicarious FHA liability by showing all of the following EXCEPT:

• A.A written anti-harassment policy distributed to all agents
• B.An accessible complaint procedure including an alternate contact if the broker is the alleged harasser
• C.Documented training and prompt investigation of complaints
• D.The policy was created after the complaint was received

Q15.Under the Equal Credit Opportunity Act (ECOA, 15 U.S.C. § 1691 et seq.) and Regulation B, a DC mortgage broker affiliated with a real estate brokerage collects a buyer's loan application. The buyer is a married woman, and the mortgage broker asks her to have her husband co-sign the application even though her income alone qualifies for the loan. The real estate broker, aware of this practice, does nothing. Which of the following MOST accurately describes the legal consequences?

• A.The mortgage broker's conduct is permissible because lenders may always require a co-signer to reduce default risk, and the real estate broker has no duty to intervene in lending decisions.
• B.The mortgage broker has violated ECOA by requiring a co-signer based on marital status when the applicant independently qualifies; the real estate broker may face ECOA liability for knowingly facilitating or referring business to a lender engaged in discriminatory practices, and the buyer is entitled to a written notice of the specific reasons for any adverse action.
• C.Only the creditor (lender) can violate ECOA; the real estate broker has no ECOA exposure because brokers are not creditors under Regulation B.
• D.The conduct violates the Fair Housing Act but not ECOA, because ECOA applies only to race and national origin discrimination in credit transactions.